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Europe’s solar power industry is on the verge of bankruptcy due to an influx of cheap Chinese imports. This surge in competition has caused a massive drop in prices, with solar modules experiencing a decrease of over 25% since the start of the year. SolarPower Europe, a trade group for the industry, has raised concerns with the European Commission about the risks this creates for companies and the potential for insolvency. Examples of struggling manufacturers include Norwegian Crystals and Norsun, both of which have faced financial difficulties in recent months.
The European Union (EU) aims to rely heavily on solar power to meet its renewable energy targets, but the dominance of Chinese products in the market has raised concerns about dependence on China. Currently, China accounts for about 75% of the EU’s solar power imports. Manufacturing solar modules in Europe is more than twice as expensive as the current spot price, creating an imbalance in the market.
The EU previously imposed tariffs on Chinese imports in 2012, but these were lifted in 2018 to support the growth of renewable energy installations. Despite calls to reconsider these tariffs, the EU has yet to reinstate them. Brussels has been urging European companies to diversify their supply chains away from China due to geopolitical tensions, but no specific action has been taken to address the issue. The decline in solar module prices also puts the EU’s goal of manufacturing 30GW of the solar power supply chain in Europe by 2030 in jeopardy. The wind industry has expressed similar concerns about Chinese rivals undercutting European turbine manufacturers.
Furthermore, China’s significant subsidies and overproduction of batteries for electric cars pose a threat to Europe’s ambition to expand its production of EV batteries. To address these concerns, SolarPower Europe, along with over 40 solar companies, has called for an emergency acquisition of European solar manufacturers’ inventories and the acceleration of regulations banning products made with forced labor. Approximately 40% of the world’s polysilicon production, a key material for solar panels, comes from Xinjiang, China, where human rights abuses have been reported.
The solar power industry is urging EU leaders to take immediate action to address the challenges posed by cheap Chinese imports. The negative impact on the sector necessitates urgent intervention to protect the industry and achieve the EU’s renewable energy goals.
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